When Bell Canada parent BCE Inc. BCE-T goes before the federal broadcast regulator Tuesday to ask for approval to buy CTV Inc., it will argue there’s no problem with owning both TV content and the cable “pipes” it travels through. But some of its competitors have a plan to use Bell’s own words against it.
They believe a ruling by the Canadian Radio-television and Telecommunications Commission (CRTC) last week bolsters their case that such a business structure is potentially unfair to competitors. Ironically, Bell was one of the companies whose complaints sparked that ruling.
On Wednesday, the regulator said Quebecor Inc. QBR.B-T must offer to competitors video content it owns through its TVA network. The company, which also owns an online video-on-demand service through a subsidiary, had been keeping the content for its own exclusive use.
Now Telus Corp. T-T which joined Bell in that complaint, says it will use the ruling as a precedent to argue that more safeguards are needed in the deal struck in September for BCE to buy CTV.
“I think the Bell hearing just became a lot easier,” said Telus’s senior vice-president for government and regulatory affairs, Michael Hennessy.
At issue is the control of TV content on emerging platforms. Canadians are watching more video online than ever before, and content on mobile devices such as tablets and smart phones is becoming more important to the industry.
Bell has been an early player in mobile video. It bought exclusive rights for the Vancouver Olympics for its wireless devices, and also has exclusive deals with the NHL and NFL for mobile content.
Telus argues that Bell’s complaint against Quebecor goes against Bell’s own strategy for exclusive content.
“The commission essentially said that it is an undue preference to grant yourself exclusivity, particularly when it’s coming because it’s your affiliated programming,” said Mr. Hennessy.
Last year, the CRTC approved Shaw Communications Inc.’s SJR.B-T deal to buy the CanWest television assets. In that deal, the regulator said it expects Shaw to give competitors access to the TV programming it owns, including on mobile and on the Web, “on commercial terms.” Telus had asked for such a condition at the hearing.
Telus, and another competitor Cogeco Cable Inc., will now ask the regulator to make the same demands of BCE.
“Preferential access to content on one of the non-traditional platforms would allow BCE to strengthen its position in the market for bundled services,” Cogeco stated in documents filed with the CRTC on Jan. 11, calling for further safeguards.
In a call with analysts to discuss the CTV deal in September, BCE chief executive officer George Cope said that it would not necessarily keep content from CTV or its specialty channels off competitors’ mobile phones. But he didn’t rule it out. “We don’t have to offer anything to our competitors, in the mobile or in the sports genre, in the news genre, or on any of the technologies,” he said.
Bell disagrees with its competitors’ arguments against such a strategy. “I think Telus is making a great leap by saying this automatically proves you can’t do an exclusive deal on wireless,” said Mirko Bibic, Bell’s senior vice-president for regulatory affairs. Bell offers the NHL and the NFL because it negotiated mobile rights directly with the leagues, he said, which is different from Quebecor using the broadcaster it owns to restrict its competitors on the TV side. “The NFL went out to [the] market, shopping its wireless broadcast rights. Everybody in Canada, all the wireless players, had a chance to bid for those rights.”
